25 Apr 2014

With a spate of public
holidays around the Easter weekend market action was quiet with global
sentiment most influenced by continuing uncertainty in Ukraine. Regional voting
days affected stock exchange opening in India, where the market moved sideways
again as concerns about the impending monsoon season offset recent
election-driven exuberance. The Nifty added just four points to close virtually
unchanged at 6783, after trading in a range of less than 1.5%. Average daily
trading volumes slipped to $2.9bn which is still higher than the twelve-month
trailing average. Foreign portfolio investment turned positive again, with FIIs
buying a net $188mil, substantially from domestic institutions, which sold a
net $172mil. Volatility stayed around the previous week’s levels, as the India
VIX opened at 31 and traded up to 38 before closing where it opened. Market
breadth was even with advances balancing declines but there were some
concentrated points’ contributions. The two Consumer majors, HUL and ITC, cost
the Nifty 45 points between them but this was almost offset by a 35-point
contribution from Larsen & Toubro. The three-month Nifty futures closed at
a premium of 1.5% to cash.

18 Apr 2014

This week
was dominated by the Ukrainian crisis and signs of a settlement from talks in
Geneva on Thursday, allowed global equity markets to relax for the Easter
weekend. Public holidays cut the week to three trading days in India and the
market shuffled sideways, adding just three points to close barely higher at
6779 after trading in a range of 2%. Average daily trading volumes stayed
relatively high at $3.1bn as FIIs turned net sellers of $11mil amid signs of a
global “risk-off” stance, joining domestic investors who sold a net $104mil.
Volatility stayed elevated, with the India VIX trading around last week’s close
of 29, before adding a couple of points to close at 31. Market breadth was
neutral, with as many advances as declines but there was little evidence of
concentration and a broad range of stocks made small points’ contributions,
positive and negative. The three months’ futures closed at a premium of just
1%.

The
fourth quarter results season kicked off with Infosys pleasing the market with
figures in line with expectations: sales grew 23% year on year and profits by
25%. More importantly, margins were stable at 25% and revenue guidance for FY15
was 7-9% in constant currency, slightly better than expected. The market liked
this and the company’s stock rose just under 1% on the day. Intriguingly, TCS
stock rose by over 4% that day and a couple of days later the company duly
reported its results: revenues ahead by 31% and profits by 52%! The third
announcement of interest to us came while the market was closed on Friday:
Reliance Industries announced sales ahead by 13% for the quarter and profits by
1%.

11 Apr 2014

In India the general election has pushed company news
well into the background. In the meantime global equity markets appear to be
going into reverse, led downwards by overvalued technology counters reaching
for support at a more reasonable level. The Nifty added eighty points to end up
at 6776: a gain of 1.2% after trading in a range of 2.5%. Average daily trading
volumes have risen well above their twelve-month trailing average, to $3bn as
foreign portfolio investors continue to be net buyers of cash equities,
investing a total of $788mil. Domestic investors sold a net $596mil. Volatility
jumped sharply, however, with the India VIX rising from the high teens to touch
30 before closing at 29, adding ten points. Market breadth was strong with
gainers more than two to one ahead and very little concentration: only two
stocks made big points’ contributions either way: Sun Pharma on a takeover story
and Infosys as it retreated before its Q4 results. The three month futures
contract closed at a premium of 1.3% to cash

The general election has
started its nine-session course and all opinion polling is now banned, so the
media only has anecdotal evidence on which to build a story. So far, the news
is that with an additional 100 million voters eligible since 2009, turnout is
running 10-15% ahead in the constituencies which have voted. Exit interviewing
suggests that the BJP is holding its reported advantage among voters, who are
expecting the party to take rapid steps to restore the pace of growth. The AAP
(Common Man Party) is also making headway where it has candidates running.

About Himalayan Fund NV

The Himalayan Fund N.V. is an investment company with its primary objective to generate long-term capital gains for shareholders by investing in India.

This blog shares with you interesting, weekly news about the Indian economy. It provides insights about the financial situation in India and its market. The team of Himalayan Fund offers knowledge about investment opportunities relating to India.

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